Stock in Daenerys Industries has a beta of 1.2. The market risk premium is 6 percent, and T-bills are currently yielding 5.3 percent. The company's most recent dividend was $1.70 per share, and dividends are expected to grow at an annual rate of 5 percent indefinitely. If the stock sells for $35 per share, what is your best estimate of the company's cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.., 32.16.) Cost of equity
Stock in Daenerys Industries has a beta of 1.2. The market risk premium is 6 percent, and T-bills are currently yielding 5.3 percent. The company's most recent dividend was $1.70 per share, and dividends are expected to grow at an annual rate of 5 percent indefinitely. If the stock sells for $35 per share, what is your best estimate of the company's cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.., 32.16.) Cost of equity
Chapter12: The Cost Of Capital
Section: Chapter Questions
Problem 22P
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